Aviation Sector contributes largely to Dubai’s economy

Aviation Sector contributes largely to Dubai’s economy: 37.5 percent to its GDP and will support over 750,000 work positions by 2020

The United Arab Emirates (UAE) aviation sector, including Emirates Airline and Dubai Airports, contributed a total of $26.7 billion to Dubai’s economy during the previous year. The contribution amounted to 27% of Dubai’s GDP as a whole. Additionally the aviation sector offered 416,500 jobs equal to the 21% of total employment in Dubai.

These records were based on a report conducted by Oxford Economics, an international research company, which publicized the figures in its most recent report, Quantifying the Economic Impact of Aviation in Dubai. The same company conducted the same research in 2011.

The purpose of the report was to measure and calculate the extent in which the aviation sector influences the economy and Dubai-based related companies. The report outlines the beneficial influences Dubai’s economy has enjoyed during 2013 concerning Gross Value Added (GVA) and employment rate. The report also examines how the aviation sector will influence the emirate’s economy in the future (2020, 2030)

The report asserts the extent the aviation sector contributes to the economic growth as well as contributing towards other industries, posing as a means for a range of activities and fields within the economy.

The reason Dubai has developed incredibly during through the years is due to the goals and visions set by its government as well as strategic planning and cooperative work. It comes as no surprise that Dubai is an international aviation hub at present. Dubai has worked hard through the years to become more competent and create an infrastructure, in order to further develop and grow. Dubai will continue investing in its infrastructure, welcome international competition amongst other aviation sectors and aim to open new efficient markets while conducting effective activities and implementing efficient policies. Finally, Dubai’s aim is to become the number one destination amongst international travelers as well as traders, who will consider the emirate as a great destination and transport centre.

Aviation Sector Contribution to Economy

The entire aviation sector, including Dubai Airports, Emirates Airline and other related aviation businesses like airlines flying in and out of Dubai, Dubai Duty Free and other authorities, contributed a total of US$16.5 billion to Dubai’s GVA during 2013. The amount also takes into consideration direct, indirect as well as other contributions. The amount contributed by the aviation sector attributed to 16.5% of the emirate’s GDP, and it is estimated the sector offered 259 thousand jobs in Dubai alone.

Additionally, every $100 generated from the aviation field, an additional $72 is spent in other fields within the emirate’s economy. Likewise, for every 100-work positions created within the aviation field a further 116 work positions are opened in the emirate.

Tourism-Based Benefits

it is not surprising that the aviation sector has positively influenced and enhanced the tourism industry in Dubai. in 2013 total tourism and other travel related activities contributed $10.2 billion GVA, which in turn opened an additional 157,100 employment positions. During 2013, almost 10 million non-UAE travelers visited Dubai. Their total expenditure amounted to $13 billion.

Both the public and private aviation sectors worked towards establishing and developing Dubai’s aviation and tourism infrastructure, aiming to further support and enhance inflow of tourists. Dubai’s efforts have paid off since at present the emirate holds a 0.4% share of business and tourism inflow, two times more than in 2000.

Connecting Flights from Dubai

One of Dubai’s most significant attributes is the connecting flights it offers to other destinations.  According to the report, visitors could connect to 25 cities internationally from Dubai, equal to lightly over 80% of international cities. In general, during the previous year, Dubai offered travelers connections to about 150 cities, populated with more than one million people, thus establishing possible export markets in 13% of the world’s overall population. Likewise, cargo tonnage has also developed and grown significantly since 1990, showing a 13.5% growth annually. Average international trade has also experienced a 5.6% growth rate annually.

Both Dubai’s passenger and cargo connecting flights have positively influenced trade and Foreign Direct Investment (FDI) as well as opening doors to new foreign, enhancing exports and rising the amount of competition within Dubai’s local economy.

Predictions of Economic Benefits in 2020 and 2030

During the next six years, Dubai’s aviation sector is presumed to grow due to its International passenger and cargo inflow. The aviation sector’s airline as well as airport capacity is constantly expanding in order to cater to the increasing demand. 

In accordance to the estimated growth the aviation sector will experience and Dubai’s plans to expand both its airports, Dubai International (DXB) and Al Maktoum International at Dubai World Central (DWC), it is presumed that the sector will contribute a total of $53.1 billion by 2020, including both tourism and aviation activities.

According to forecasts made, by 2020, the UAE will have the capacity to fly as much as 70 million travelers. The UAE’s airline and all its associates are already establishing plans to create the efficient infrastructure required to support the increase in the number of travelers. During 2020, Dubai will host the Expo 2020, which will attract more than 20 million visitors. Nonetheless, Dubai is hopeful all will run smoothly, as it has already began projects required to accommodate all the visitors.

The plan is to expand the size of the airports, which entails increasing airspace, stands areas, terminal areas and airfield. The aim is to be able to accommodate as much as 60% more airplanes by the end of 2015, and have the capacity to cater services to 90 million travelers by 2018. By 2020, it is forecasted that Dubai International will cater to 126.5 million travelers, 30% more than what was initially estimated in 2010.

By 2013, the aviation sector is estimated to contribute $88.1 billion to the emirates economy, supporting 1,194,700 positions in total.